What's the next big thing in warehouse management software? Quite possibly, the electronic "window on the warehouse"—technology that allows managers to view all of the stock sitting in racks at their distribution centers via a standard Web browser. Over the past year, several of the more than 200 warehouse management system (WMS) vendors in the marketplace have upgraded their packages to give users that visibility.

If nothing else, this move has served to raise the stakes among WMS vendors. "You can't sit back and be an old-fashioned WMS now," notes Richard D. Armstrong, president of the consulting firm Armstrong and Associates in Stoughton, Wis., which publishes a guide to logistics software. "You have to have an Internet front end."

Web-based inventory visibility is a big plus for logistics managers who need to know what's on hand in the company's distribution center. And extending that visibility to a company's supply chain trading partners could go a long way toward improving the flow of products in a pipeline—but only if companies are willing to share that information with their customers.

Since their debut more than a decade ago, WMS packages have been keeping corporate America's inventory records up to date. Unlike enterprise resource planning (ERP) programs, which provide an aggregate view of total inventory, WMS applications keep track of particular items, down to the individual bin location on a storage rack. When used in conjunction with bar codes and radio-frequency systems, WMS packages can monitor the movement of products and parts into and out of a warehouse in real time.

The advent of the Internet has created a new set of expectations on how inventory records should be presented. Consumers and business users alike have grown accustomed to the look and feel of Web browsers like Netscape or Internet Explorer. They don't want to view long lists of parts numbers on the old-fashioned "green screens."

In addition, many logistics managers who are physically located off the warehouse premises want Internet inventory visibility in order to make better business decisions. "Inventory visibility allows companies to accomplish two tasks: reduce costs and improve customer service," notes Irving Chernofsky, a research director at the Gartner Group, a research and consulting firm based in Stamford, Conn.

On top of that, many online merchants now want to be able to look into their suppliers' warehouses so they can figure out what products they can offer their customers. "There's a market demand for visibility so you don't have information black holes," says Dwight Klappich, a program director with the Meta Group, a market research firm in Stamford, Conn. "Customers are demanding information about [item availability], especially since they have no safety stock."

Bowing to customer demand for Web-enabled inventory visibility, the major WMS providers have begun adapting their programs to offer that technology. "All of the major vendors are doing it in some form or fashion," reports John Fontanella, the service director for business-to-business marketplaces at AMR Research in Boston.

Industry leader EXE Technologies, for instance, already offers Web-based visibility. And its chief rival, Manhattan Associates, plans to offer real-time visibility in the second quarter of this year as part of its "digital dashboard," which displays data on warehouse activity in a graphical format. Likewise, McHugh Software International has unveiled its "LENS" product, which purports to offer visibility of stock across a company's entire network of distribution centers, and Irista has unveiled its iristaVision application, which offers visibility of inventory sitting at the warehouse or loaded on a moving vehicle. Lilly Software also provides Web-based inventory visibility for authorized users who want to view aggregate stock quantities over the Internet in real time.

The WMS vendors that target medium-sized companies are also developing Web-based inventory visibility capabilities. Motek, for instance, offers browser access for checking inventory quantities. Majure Data's warehouse solution provides information in real time to a Web front end. Sameday plans to introduce a Web-based WMS aimed at companies managing medium and small warehouses.

All of these WMS players believe that this capability will help distinguish them from their competitors. "The WMS vendors have been struggling to raise their profile in a fragmented market," says Klappich. "They look at visibility as a way to provide a more strategic application."

But some industry experts believe that any marketplace advantage afforded by Web-based visibility will be short-lived. "[Web-based visibility] has been a common request for the last 18 months," notes Phil Obal, president of Industrial Data and Information Inc. in Tulsa, Okla., a company that publishes a directory of WMS software packages. "If the software house is listening to the customer base, it will provide this capability. By the end of this year, this won't be an issue."

Though the ability to view inventory via a Web browser seems innovative now, many industry experts consider this just the first step in a broader drive to offer complete visibility over inventory throughout the supply chain. To provide a true supply chain view, however, the software would have to keep tabs on the inventory held by trading partners and the freight being handled by carriers. "Visibility is about coordinating the activities of multiple supply points," notes Henry Bruce, a vice president of market strategy at the software maker Optum in White Plains, N.Y.

Not surprisingly, several WMS players are using their applications as the basis on which to build an extended enterprise solution. Yantra's PureEcommerce 3.0, Optum's TradeStream, and Provia's ViaWare are just some examples of WMS offerings designed to provide a picture of inventory across a warehouse network.

But WMS vendors aren't the only software suppliers developing this capability. Vendors of transportation management software, advanced planning and scheduling software, and even electronic commerce packages have developed (or are developing) application enhancements that facilitate supply chain visibility. But sooner or later all of these parties come up against the same stumbling block: the need to connect disparate systems. "It's hard to extract information from multiple systems," notes Klappich. "The vendors are minimizing the issues there. It's real hard to get real-time visibility across multiple locations and include carriers."

Another problem is that any weak link in the supply chain network could well undermine visibility for the whole network. "The lowest common denominator will determine visibility," points out Gary Cross, a consultant in IBM's supply chain practice in Cleveland. "If one WMS doesn't update hourly, it affects the entire chain. Your supply chain inventory information is only as current as that last update."

But even in cases where a WMS application can provide a real-time view of what's in stock at a particular warehouse, some suppliers may be reluctant to share that information with trading partners. For one thing, says consultant Jim Uchneat, shared information has the potential to create numerous business headaches and conflicts. For instance, imagine a case where a computer parts vendor makes its warehouse inventory visible to two competing computer manufacturers. Both makers would have a view of the entire parts inventory and might feel entitled to all of it at the other's expense. "One of the challenges in providing information is what expectations you set with it," says Uchneat, a managing director at the Cambridge, Mass., firm Surgency Inc.

For that reason, Klappich believes that suppliers will begin controlling who has permission to see their inventory online. He expects companies to establish a mechanism whereby a supplier first submits a query about stock availability over the Internet and then gets permission to view only a selective portion of the inventory on hand. "The whole connectivity issue," he notes, "is both technical and political."

Political issues aside, most WMS vendors will press ahead with the development of Web-based inventory technology. In fact, most plan to take the technology one step further—combining inventory visibility with capabilities for alerting managers to problems that arise, such as a missed pickup or a shortage of parts in a warehouse. "I don't want visibility of every can on the production line," says consultant Rich Sherman, president of Gold & Domas Research Co. in Westborough, Mass. "I just want to know when the cans go out of a set tolerance. I want to be able to define events that will trigger alerts so that managers can take action."

"Visibility in and of itself means nothing," Sherman adds. "It's the capability to use that cross-network information to manage a supply network that counts."